Gearing Up to Buy in a Competitive Market
In many real estate markets, 2021 is shaping up to be one of the most competitive for buyers in recent memory. Low interest rates, rising construction costs, and a global pandemic have combined to send buyers with healthy budgets on the hunt for a home that meets their needs. But with limited inventory to select from, it’s not always as simple as finding the right house.
Now, peak home-selling season is in full swing, and more buyers are joining the search. Before you attend a showing, position yourself for a winning bid with these strategies to conquer a competitive buying season.
The first step to most home purchases is getting the financing squared away. The interest rates currently available have increased the demand for new mortgages and refinancing of existing ones. Before attempting to buy in a seller’s market, you must thoroughly explore your financing options and be well on your way to completing the mortgage process.
One reason it’s critical is that it establishes your budget. If homes are selling quickly for top dollar, you won’t want to waste time chasing houses you can’t afford. Working closely with a lender will clarify how much cash you will need for closing, what your maximum loan amount is and how quickly you will be able to close. Each will be important when submitting an offer.
Refine Your Offers
Once the details of financing options are known and you find a property that you are interested in buying, you can submit an offer. However, the sales price is just part of the equation. A successful bid will need to be strong in other areas and be designed strategically for a particular property.
Flexibility on the closing date can be a significant advantage in some cases. Your due diligence with financing and not needing a contingency to sell another property will make it easier to close quickly. In other cases, a delayed closing or leaseback can add value for some sellers. Regardless, an experienced Realtor can also walk you through ways to strengthen an offer. Tactics such as an escalation clause to automatically outbid the competition, or specific commitments to fund a low appraisal may also be expected.
Don’t Be Discouraged
Sometimes the toughest part of buying in a strong market is maintaining your motivation. It can be discouraging to lose out to another buyer, particularly when you don’t know the deciding factor.
Fortunately, there will always be new listings to consider. Stay optimistic and focus on the future rather than dwelling on the outcome of a single offer. In addition to narrowing down your list of must-haves, consider how some sweat equity or a renovation loan may be able to expand your home search.
Having the right partners can make all the difference when the competition for homes is fierce. Call today to speak to a representative about your best path to homeownership. Or explore our website for more tools and tips to simplify homeownership.